Didn't Obama cap the interest rate for student loans and also applied an "ability to pay" provision that locks the repayment to something like 10% of income?
Also the government makes billions from the loan program, for which they would loose a lot. The Administration said they would find a way to "offset" the loss. Meaning more debt.
Didn't Obama cap the interest rate for student loans and also applied an "ability to pay" provision that locks the repayment to something like 10% of income?
Also the government makes billions from the loan program, for which they would loose a lot. The Administration said they would find a way to "offset" the loss. Meaning more debt.
I don't think the cap passed, but I may have missed that. Never heard of the 10% of income part till now. However, the issue is the government is lending money to people that can't pay it back, even if it's interest free or 10% of income. And if the students aren't getting jobs to pay taxes, then the government is not going to have more money to lend. it's a viscious cycle, and a recipe for disaster.
In an attempt to further ease heavy college debt, President Obama on Monday signed an executive order allowing millions of student-loan borrowers to cap their payments at 10 percent of their monthly income.
(Still buying votes even though he can't be re-elected).
Edit: I don't know how the government can make any money on student loans when we subsidize the interest rate and guarantee the loan amount. The government also forgives loans after 120 payments are made and the borrower works for a non-profit employer (i.e. teachers). The only party that can't lose is the private lender.
[This message has been edited by spark1 (edited 06-24-2014).]
(Still buying votes even though he can't be re-elected).
Edit: I don't know how the government can make any money on student loans when we subsidize the interest rate and guarantee the loan amount. The government also forgives loans after 120 payments are made and the borrower works for a non-profit employer (i.e. teachers). The only party that can't lose is the private lender.
I wasn't challenging that, I just remember it being a point of contention, but as usual, when he doesn't get his way, he issues an executive orders.
quote
From the first sentence of the article:
In an attempt to further ease heavy college debt, President Obama on Monday signed an executive order allowing millions of student-loan borrowers to cap their payments at 10 percent of their monthly income.
Something that he should not be allowed to do, but congress always rolls over and allows. The bubble will burst. It is unsustainable.
Jim
[This message has been edited by jimbolaya (edited 06-24-2014).]
Ive said for years now, its very hard for someone just graduating college to be able to even pay payments on $100K-$125K (on average). Theyre lucky in most cases to find any job above minimum wage...and that will barely pay living expenses now. OSU for example runs $29,700 a year according to figures given this morning and is the 9th highest in the nation.
My first jobs out of the Air Force were so low paying, I had to skip monthly payments on a car that was $15.00 @ month. I definately couldnt afford even a 10% payment.
[This message has been edited by rogergarrison (edited 06-25-2014).]
The bubble will burst. It is unsustainable.
